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Arsenal’s new sponsorships mean the club could afford four Falcao’s

Today Arsenal announced a £150m deal to continue their relationship with corporate sponsors Emirates. The terms of the deal include an extension of the shirt sponsorship and training kit sponsorship until summer 2019 and an extension of the naming rights to The Grove for an additional 7 years giving Emirates the name of the stadium until 2028. By which time all current Arsenal fans will have died from stress.

Additionally, Ivan Gazidis revealed that there are some “front loaded” terms to the contract which will put a chunk of the money into Arsenal’s “war chest” for this summer and which the club is insisting that Arsenal will spend on players. “We have been able to talk to Emirates about the payment terms and bring some of them forwards, so that we will have additional money in this financial year which we will be able to invest in the summer.”

Gazidis sought to assure fans that “The deal is all about football. It is all about giving us the resources in what we believe is a responsible and well managed way, to be able to invest in what we put onto the pitch for our fans.” Presumably that means Arsenal won’t spend the money on Arsenalization, bonuses, or dividends to shareholders.

As for who will be in charge of spending the money, Gazidis gave his backing to Arsene Wenger stating, “Those decisions on investment are made by our manager, and he has done an outstanding job of managing the resources of the club over time, and we expect that to continue, but he will have more resources available.”

Divided by the terms of the shirt sponsorship the deal is worth £30m a year and puts Arsenal in rarified air among the elite teams in world football. Manchest Untied signed a £350m 7 year deal with Chevy which averages £50m a year, however, it starts next season at just £43m and grows as the contract goes on. United also receive £10m a year for DHL to have a spot on their practice jerseys, bringing their total to £60m a year for shirt sponsors. Barcelona’s shirt deal is worth just £25m a year, kings of corporate sponsorship Bayern Munich’s deal is worth £16.8, and the European Champions Chelsea receive the paltry sum of £14m a year to wear Samsung whilst racially abusing black colleagues.

One could look at the first deal with Emirates and get a perspective of how much Arsenal have gained. In order to build the new stadium Arsenal took a deal worth £90m from Emirates, with £42m going to the naming rights of the stadium for 15 years and £48m going toward the name on the front of the shirt for 8 years. That works out to £2.8m a year for the stadium and £6m a year for the shirt.

Arsenal are not disclosing how they divided the £150m new contract with Emirates. But we do know that under the new deal, Arsenal threw in 7 years of naming rights to the Emirates stadium which we also know, under the terms of the current deal, is worth around £3m a year. Since we don’t know how much they actually got for the deal we can make up any number we want that suits our agenda. If you’re wont to complain about the deal, leave it at £3m and complain that you know for a fact that Arsenal could have sold the naming rights for more in 2021.

On the other hand, if you wanted to make something up you could double the initial contract. Then Arsenal are getting £42m for 7 years of renegotiated naming rights on a contract that wasn’t set to expire for 9 more years. There aren’t too many examples of stadiums having their naming rights renegotiated and none where they were extended so far out. The closest example is Gillette stadium in Foxboro Mass. which was worth £5m a year and runs until 2031. Thus, £6m a year for naming rights on a property that didn’t come up for negotiation until 2021 is a pretty damn good deal. But like I said, I made that number up, just like people complaining about the deal are making numbers up.

There’s also the issue of where the front loaded payment is coming from and I bet you dollars to doughnuts it’s from the naming rights. If I’m right about that and about the amount, then that means Arsenal will have an additional £42m to invest in the squad this summer.

If we continue with my imaginary positive contract, that leaves a shirt deal worth £108m over 5 years. If United, who have won every single Premier League title since the beginning of time and are the most valuable club in the world, received £10m a year for their practice kit then Arsenal, who haven’t won a trophy in 7 years, would do well to get a deal in the range of £5m per. That reduces the shirt sponsorship deal to £83m over 5 years, or £16.6m per year.

All totaled in my feel-good world, that means Arsenal got a lump payment of £42m for stadium naming rights that weren’t set to expire for 9 years, an increase of £10.6m per year on their shirt deal, and a new £5m per year payment for their practice shirts. £42m to spend on transfers and £15.6m per year to spend on salaries.

Or you could do what the official site is doing and claim it’s a £30m per year, five year deal. If you do that then it’s an increase of £21m per year over Arsenal’s current deal. That is the most positive spin to put on the whole thing.

Arsenal are spinning the deal positively, almost bragging that they will have a lump sum to buy players with this summer, and they are claiming that the club is going to spend the money on players. There’s also the matter of the very large amount of cash on hand that has many Arsenal fans angry. So, announcements from Peter Hill-Wood about “not pulling a Rangers” are going to sound mighty foolish indeed if the club doesn’t buy several big names this summer. Sorry, but that’s the bed they are making with today’s announcement. In a sense, they are now forcing themselves to “spend some fucking money”.

Now, how do you spend that money?

Well, Arsenal normally amortize transfer fees which is why the lump sum up front investment is a bit strange. But let’s pretend that they continue with business as usual and that means if they pay £30m for a player like Falcao, they mark it down in the books as £6m a year over the five years of his contract. Top players like Falcao demand top salaries and while he won’t get what Zlatan earns at PSG (£1m a month NET) he could easily command £5.2m a year. If we take our super-positive £21m extra per year figure and use it to buy Falcao, that leaves just £10m per year remaining. With that £10m, Arsenal could buy a £20m player (amortized!) and pay him £5m a year over five years as well.

And that’s how a £150m deal is now worth just two additional top quality players.

Of course, Arsenal are in a better position than that. If the club can slough off the salaries of certain players and get leaner in that regard they could realize another £10-15m a year in savings (10% off the current wage bill would be a great deal). Which is another top level player per year. And now we are up to three players in the Falcao category.

In addition, Arsenal have the new shirt manufacturer contract to announce. The amount there is rumored to be whopping £25m a year, an increase of £17m a year if true (again, borrowing from Swiss Ramble’s post where he claims Arsenal receive £8m a season from Nike). That’s a huge increase in commercial deals for the club and gives Arsenal the buying power to add a fourth Falcao to the team and another player in the range of, say, Cazorla.

All totaled, if we take the most positive spin on the sponsorship announced and the one ready to be announced, mix in a little salary savings which will happen automatically when certain players’ contracts expire, leave the cash on hand untouched, and Arsenal could be looking at four Falcao’s next season. Maybe more!

I am holding out hope that Arsenal find a way to start at least three of those Falcao’s with Cazorla in the hole.

Those three Falcao, can we assume that they could also include our own players. Like maintaining our stature like-Falcao players in our team. Because we have a hobby to run down important players contract, which usually more than one, then maybe these deals will bring us Walcott, Sagna, and Falcao. How about an inflated prices English player, like Baines?

I also wonder, if it’s true that our regularly profit earnings of the club really help in negotiating commercial contracts? Or it’s purely just based on a success on the pitch conditions?

The commercial deals are based on market exposure, Arsenal has a huge global following and is a recognisable brand essentially everywhere in the world. Emirates gets access and exposure to these fans, plus can interact with this fanbase indirectly and directly through cross-channel and mutli-channel IMC. Success on the pitch is not a key factor, nor is the fiscal “tightness” of the club. It’s about ROI for Emirates and access to the large Arsenal fan demographic and having their name broadcast to billions of people worldwide every week (or day really).

Of course that is the whole point on commercials sponsorship. But, I have a thought that our way of doing is becoming a brand in itself, just like there’s a Wenger brand which accumulated with Arsenal brands. Now those brands might help in selling us to the global world. But then again, that is just my thought, and that is why i wonder, is it just me or people here could enlightened me with their thoughts on it..

Having it is one thing, spending it is another, as we Gooners know too well. I really hope that any such “front loaded” payment that makes us cash heavy in the near term is spent on the pitch. We have managed our affairs extremely well for just such an occasion.

Le Boss, with his usual articulateness reminds us again of what we have achieved:

“Wenger’s happiness at Arsenal’s 13th successive qualification for the last 16 has reinforced his faith in the club’s self-sustaining business model. He did not say it but Chelsea’s Champions League toils, following their huge summer spend on players, have been greeted with glee at Arsenal. Vindication, though, will not arrive until further progress is made.

“It is a massive satisfaction because I am, so many times with my back to the wall, accused of not spending fortunes,” Wenger said. “To show that we can do it, with the way we do it, with the club in a good financial situation and with the players coming from our youth development … I think it is important for the game as well. There are many different ways to be successful and I am very happy that our way is one of them.”
(from The Guardian)

First thing that should happen is increasing the pay of selected players and and hopefully giving us a fighting chance of maintaining squad continuity. Santi Cazorla, a bona fide Spain international, is on £70,000/wk which is an absolute steal from our standpoint but seems woefully inadequate considering his considerable contribution to the team and his stature in world football. It’s less than what we’re reportedly offering Theo and what Arshavin is already on. Mikel Arteta ought to be given back all or at least some of the pay cut he reportedly took in order to facilitate his transfer from Everton. Sagna’s the best right back in the BPL, by all accounts popular in the dressing room and a quiet leader in the squad and needs to be re-signed. And of course, we should probably improve our offer to Theo. Just a few examples right off the top of my head.

Aye, a Yaya type would fill a void we have in the centre. A player who can dribble, shoot, take on players, hold possession against the Catermoles of the league. Essentially Diaby without the cling-film body.

That’s not to say our current midfielders are no good, simply that we lack variety.

“I am holding out hope that Arsenal finds a way to start at least three of those Falcao’s with Cazorla in the hole.”

I love that line Tim. It’s poignantly hopeful and right for this particular blog.

O my giddy heart… we have money….hooray ….what wonderful news.
Will it really happen? The possibility of a second team similar to The Invincibles occurring again in my lifetime managed by the best manager in the world (I’m bias); Arsene Wenger.

BUT

The reality is The Chavs and the blue end of Manchester will bulk buy all the best players just to spoil our party.

HOWEVER….

Stop….hello… we have Arsene Wenger.

A man who knows of every quality player in world football.
He knows every nook and cranny; he knows every stone to lift to find the golden nuggets. He will find the rough golden children that the Chavs and the Oil Merchants may dismiss because they seek instant joy (players who can adapt; intelligent players who can shine like beacons in the Emirates sky of north London) to give us (fans and supporters) joy.

I personally can’t wait for the moment next season when the Red & White Drums Girls (I’m writing to Fans Forum to start a music section) starts beating that drum, welcoming a new era…a new beginning.

BUT FIRST WE NEED TO COME FOURTH OR ABOVE IN THE EPL COME MAY 2013 to quality for the Champions League.

Quick correction more than anything else…United’s 350mil deal over 7 years, includes 22 mil or so covering the previous two years under Aon…and it includes training kit so they’re buying out their DHL Deal…so its about 45-47mil a year total…not 60 like you’ve said.

As for the rest of this post, you’re right…the club have basically said we have money to spend but I think we all need to keep in mind that we’re not just going to spend for the sake of spending…I think Arsene has very specific targets in his head (Gotze and Reus have been high on his wishlist in recent years) and I think we’ll only go after players who will truly make us better…which is what we should be looking at anyway and I think we have a promising future ahead especially considering FFP should level the playing field more

I think there’s something weird about the way the club are talking about these deals and it’s putting themselves under a lot of pressure to go out and sign some big names. But hey, it’s a good problem to have I guess.

Perhaps Wenger already has his targets and we have done some ground work in these future signings? (Like Poldi this year being announced so early, they must have got to work on that one very early)

That’s the only thing I could thing of to explain it, that they are confident in who they will get with this money. Also, that Walcott aside, we probably shouldn’t see any of our players departing this close season. So there’ll be some continuity for the first time in a long time.

I hear the “we want falcao” chants but i really don’t think wenger will go that route because he’s going to be OVERPRICED. It’ll take at least 30Mil to get him and i doubt wenger will spend that much on one player. I think maybe 17mil or around there might be able to get a cavani with is a similar player that i personally rate very highly. We should even throw a chamakh their way. But anyways, my real thoughts when i heard about this deal was that where will wenger spend the money? Like honestly i understand we need to improve our strike force but now that Oli has started to gel with the team, are we gonna bench him or podolski in favour of this new striker? Will podolski accept a bench role? And other than the strike force, where else in the team do we need strengthening other than maybe 1 more DM (i.e. M’villa). I’m excited about the money coming in but i think wenger should just buy maybe 1 big name (put bum in the seats) type of player and that should be it.

That’s bold–but right–to leave Vermaelen on the bench today, and I can see the sense in resting Wilshere, but why is it that Ramsey is our only option to replace him? Injuries and thin squad, that’s why. Any midfield with Ramsey in it is vulnerable and toothless, and I’m very sorry to have to say that. Villa will be licking their desperate chops.

I think that our only option beside using youth products is using Coquelin as a DM and put Arteta in Wilshere position. But by doing that, beside the usual analysis, I think it might has to do with Arteta durability. On another note, i prefer to say Ramsey not as a result of lack of option, but he is one of the option in Wilshere position beside Diaby. If you look at Ramsey best asset, which is ball retention, stamina, and passing range, he is a sensible option.

The weather and ground conditions probably played a big part in the result today. Both teams were struggling with their passing and holding on to possession. But we still have to be better than this. This was a poor performance. (being captain obvious, I know) We also need another striker and a midfielder to give us more options to change things up. Arshavin can be a good impact player and I hope we can keep him as part of the squad.

A valuable point won under the circumstances. Our problem today was that Villa who looked more threatening had more ‘mudders’ while we had our thoroughbreds. Ramsey came closest on a number of occasions. We needed to bring on a Benayoun and not an Arshavin.

I will certainly be slated for this and should certainly achieve the top prize for minuses collected on this site, but we needed to bring on a new manager. Arsene’s scowls never seemed to invigorate his players and the substitutions were horrendous.

Subbing Arshavin for the Ox who was one of our more dangerous threats?

Subbing Coq for our other co highest goal scorer Giroud?

I know Arsene is not considered to be a tactical genius, but this was ridiculous. Whether we would have won or not is not the point here, but as a manager he needs to make decisions which give us the best chance. This was clearly not his best day of decision making.

Podolski was never really in the game today, and I really am surprised to know that anyone thought Ox was a threat to the opposition. Those two substitutions were right. If anything, a little late. The Giroud-Coquelin one is the only strange one. Was Wenger holding out for the draw? Was he hoping to allow Cazorla and Arteta to push up further with Coquelin there? Was Giroud injured when some Villa player stepped on his heel? Maybe some combination of the 3? We won’t know, and I think it’s kneejerk to ask for a new manager because of a poor performance. I know the response will be it isn’t new, but that’s because we constantly see a team in flux and never have a settled squad. Most of that isn’t really down to the manager. Hopefully, with the new deals, the next 2 transfer windows will bring us some new players while not needing us to sell our better ones.

Most of my critique of the substitutions is that the first 2 were like for like. Gervinho for Podolski and Arshavin for Ox were like for like. No change to the formation or tactics which were not working. Maybe a move to a 4-4-2 or anything to change up the game would have been nice.

It’s like we were content with and playing for the draw. I would have preferred to see us lose going for the win rather than settling with a tame draw to a bottom 3 team. No risk, no reward.

we need Rosicky and Wilshere back soonest if the team want to go forward. Cazorla needs a real footballer to partner with ( I believe he’s better on the wing ), looks like Arteta has burned out too. This team now just has no drive forward offensively. I’ve been saying since Fabregas left the void he left behind needs to be filled.
The OX is a curious case to study, he’s still technically naive, still needs to learn a lot what to do with the ball on the field. But do we all love to see when he carries the ball and charge into the penalty box ? It’s that kind of positive moves which other team members absolutely need to pick it up and motivate themselves. Can’t rely on others to do the job for you.

For me, this game was lost in the summer. Arsene chose to gamble on Diaby’s and Rosicky’s fitness. Now our midfield seems “jaded”. Well, Cazorla and Arteta have played all of our BPL and Champions League games to date. Rosicky, who can play both as the shuttler and in the most advance midfield position, has been unavailable. Hell, I like Rosicky as a player but I had serious reservations about renewing his contract like we did. Diaby, well f*** me! The only surprising thing about that is Wenger actually admitting that he gambled and that his career is in jeopardy. So he sensibly rests Wilshere but instead of having Diaby or Rosicky to rely on, he has to put in Ramsey, who actually didn’t have a bad game. But more importantly, with the busiest time of the season still to come, there’s no relief in sight for Cazorla and Arteta. When asked if we were going to buy a midfielder in the summer, Arsene crowed about our crowded midfield, citing Cazorla, Diaby, Arteta, Rosicky, Wilshere, Ramsey and Coquelin. Well, Diaby and Rosicky are back on the injured list where they’ve spent the majority of their Arsenal careers, Wilshere needed a rest, Cazorla and Arteta are getting run into the ground, and Ramsey, well he tried.

I thought we needed another striking option in the summer. Giroud had a poor performance, getting dispossessed 3 times, turning the ball over 6 times and completing only 76% of his passes but what exactly were our alternatives? Poldi, who can’t seem to last 90′ and who Arsene refuses to play centrally and Gervinho. Today we brought in Gervinho off the bench and got the post-ACON Gervinho, rather than the 5 goals in 5 games Gervinho. This squad simply doesn’t have the depth to deal with the rigors of the BPL, Champions League, and two domestic cups, especially when we have key injuries. Our first eleven is as good as any, it’s our second eleven who can’t cope.

Agreed about the summer. To be fair to Arsene, according to players themselves, and most news reports, we were in for a few more players.

Striker- Mirallas: Chose Everton because we couldn’t guarantee as much playing time (his words)
Midfielder- Sahin: Money and no buyout clause
Goalkeeper- Julio Cesar: Probably money, though bizarrely claimed it to be about having a boardroom role in the future.

To me, that shows that the manager wasn’t unaware of the deficiencies in the squad. Sure we could have bought some other players but we know Wenger doesn’t buy players of a lesser standard for the sole reason of filling a position. I agree with that policy. Basically it comes down to money. Even with Mirallas (I would guess), and despite Arsenal having money to spend, we know we had a tight budget.

I agree with your assertion about not relying on Diaby. Can’t justify that. But anyway. I think we have the basis of a good side. Will it be different this time in that we’ll actually build on it? I think (or hope) so, because of the new commercial deals taking away the club’s reason (or excuse) of shortage of funds.

Predictably, the knives are out for Wenger again. Even I heard the chants of “You don’t know what you’re doing” through the telly.

Coquelin for Giroud? Like many I didn’t get it at all, though I can understand Wilshere being left on the bench. A slip, a wrong turn and a wrench in a joint somewhere in that nasty weather would have put a dagger through the spirit of the club to say nothing the boy who’s worked so hard to come back.

More worrying is that we managed only one shot on target. One. Against Aston Villa.

How many 0-0 games have we had now? Three or four? What’s the record for most 0-0 draws in a season? Whatever it is, that is not a number that belongs in the Arsenal record book.

Two steps forward, one step back. That is the new Arsenal. Very tough away match next week at Goodison Park. Time for a step forward.
COYG!!!

As I always say, The difference between good teams and championship winning teams is the way they score goals from set pieces when needed…

There are these conditions when your fluid passing and movement is hampered and every time you take a shot..the ball has skid farther ahead than you had anticipated….A no nonsense set piece goal would have got us the win we needed against teams like Aston villa, where the quality of players is miles behind ours…

I’d definitely have preffered a Chamakh for Wilshere…if Jack was never to be used…Atleast that is a sensible back up…Wish Rosicky/Diaby was back sooner…

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